What is it called when one party announces intentions not to perform before the due date?

When one party announces their intention not to perform before the due date, it is referred to as an anticipatory breach. This concept is crucial in contract law and indicates that a party is signaling their inability or unwillingness to fulfill their obligations as outlined in a contract, which allows the other party to take certain actions in response.

By identifying an anticipatory breach, the non-breaching party is afforded the opportunity to either prepare for the breach or seek remedies, such as pursuing damages or even terminating the contract, depending on the circumstances. This preemptive communication is significant because it allows the non-breaching party to mitigate losses rather than waiting until the actual due date to address the breach.

This understanding of anticipatory breach is foundational in real estate transactions and contracts, as it helps all parties involved in a deal to navigate potential issues proactively, ensuring legal and financial interests are protected.